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Press Release

Office Of Insurance Regulation Orders Shutdown Of Unauthorized Viatical Settlement Operation
Tuesday, September 09, 2003
Contact Info:

Bob Lotane 850/ 528-2868​

News from the Florida Office of Insurance Regulation

Tallahassee – The Florida Office of Insurance Regulation (OIR) has ordered an unlicensed viatical settlement provider to immediately cease transacting business. Resource Funding Group (RFG) is incorporated in Georgia, but operates out of Sarasota, Florida. The entity has been engaging in substantial viatical settlement business without authorization. OIR has also ordered the many affiliates and entities of RFG to also cease any viatical business (see attached list). The Securities Exchange Commission (SEC) is also moving against the same principals for their involvement in Viatical Capital Inc. and Life Investment Funding Enterprises, affiliated entities of RFG.


Today's action is the result of a joint OIR/SEC investigation. The investigation revealed that the principals of RFG, Robert Kingston Coyne, of Osprey and Sarasota and Charles Douglas York, of Sarasota, Florida have taken millions of dollars from investors for the purchase of life insurance policies while misrepresenting the status and value of the portfolios. One such portfolio was described in a letter by Coyne as in good standing and valued at $1.2 million when the actual value was approximately $957,000, and three of the policies had been either rescinded or could not be located. In another instance, 14 of the 19 policies listed in one portfolio were not in force when the September 2002 quarterly statement on the portfolio was mailed.


"I am ordering the shutdown of this operation because their unauthorized activity represents a danger to the public," said Office of Insurance Regulation Director Kevin McCarty. "Additionally, I am ordering them to provide my office with a full accounting of their operations and to notify anyone they have dealings with of this action." McCarty also applauded the "fine work of my investigators and of the Securities Exchange Commission in uncovering and stopping this illegal operation."


 


Knowingly making false statements in the solicitation and sale of viatical settlements is a violation of Florida law. It is estimated that RFG has constructed portfolios valued at over $61 million. They were incorporated as limited liability companies (LLC). Each LLC was capitalized at $1 million and 200 membership units were sold at $5,000 each.


 


In a viatical settlement transaction, investors contract to purchase an interest, in whole or in part, of the future death benefits of life insurance policies. Upon the death of the insured, investors receive their share of the death benefit, which they hope exceeds their total investment. In the case of Resource Funding Group, the principals pooled the life insurance products and sold the fractional beneficial interest of these contracts through the LLCs.

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Contact Info:

Bob Lotane 850/ 528-2868​

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